• Combustion Industry News

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    • Post Author

      Patrick Lavery

      Combustion Industry News Editor

Business Trends

The Financial Times has carried an article describing the differing growth strategies of RWE and E.ON, Germany’s two largest power generation companies, and two of Europe’s largest. RWE’s strategy is seen as more conservative, with a focus on growth within Europe, while E.ON’s is one of expansion into Asia and South America, to counter-balance a decline in its European market share brought on by the rise of decentralised, renewables-based generation. RWE sees more risk in markets such as Asia and South America, and seeks growth in countries such as Poland, Czech Republic and Slovakia. The meeting point of the two growth strategies appears to be Turkey, where RWE already has a power plant, and to where E.ON is planning to expand.

China’s Ministry of Land and Resources has been exploring incentives to promote domestic shale gas production and exploitation, as the country seeks cleaner and cheaper energy. Tax breaks and subsidies are the chief incentives being explored in the lead up to China’s second shale gas licence auction, which has attracted interest from over 100 companies. The first licence auction was of four blocks of land; the second will sell 20 blocks of land (totalling 20,002 square kilometres), which gives an indication of the anticipated rise of the sector. However, it is also in its infancy – the focus is still on exploration, and commercialisation is not expected until the 2016-2020 Five-Year Plan. In addition, China requires a suitable gas pipeline network, and relies heavily on foreign drilling technologies.

Nigeria’s government has named the companies set to buy five state owned power plants, part of its strategy to privatise the country’s energy sector and promote economic growth. Each of the five power plants will be bought by different companies or consortiums, being mostly Nigerian, though Russian, British and Chinese companies are also involved. Nigeria produces only around 4,000 MW of electricity, one thirtieth, per person, in comparison to South Africa. The successful bidders of state owned distribution companies will be announced in mid-October, and one further generation company is to be sold.

September saw the opening of the Ireland-UK east-west interconnector electricity transmission link, which allows electricity trading between the two countries. Built by Ireland’s EirGrid, it is a 260 km cable stretching from County Meath in Ireland to north-west Wales, and is capable of transporting 500 MW of electricity. Remarkably, the interconnector is the largest single piece of energy infrastructure built in Ireland since the Ardnacrusha power plant in 1929. The Irish government believes it will lead to cheaper electricity prices in Ireland.

Sri Lanka’s Power and Energy Minister, Champika Ranawaka, has defended Sri Lanka’s first coal-fired power plant, Norochcholai, after it broke down in August, five months after its first stage commenced operation. Sri Lanka has traditionally relied on hydro power, but insufficient rains in recent times together with the breakdown of Norochcholai led to power cuts throughout the country. Local media had blamed the government, the Ceylon Electricity Board, and the construction company building Norochcholai, China Machinery Engineering Corporation, but Mr Ranwaka said he was confident that the plant would resolve technical issues and be stable in the long term, pointing out that other power plants in the country had also experienced breakdowns at times. When the second stage of the plant is completed, the plant as a whole is expected to deliver 60 per cent of the country’s electricity demand.

Legislation and Regulation

The European Commission is to propose new rules concerning the use of biofuels within the EU as early as this month. They are expected to limit the use of food crop-derived biofuels used in transport for meeting national CO2 targets, and drop such involvement post 2020, after concern the current rules have affected global food prices. Instead, biofuels derived from waste materials and agricultural residues will be encouraged. The proposals must win approval from the EU’s member states, amongst them France and Germany, who are at the forefront of the biodiesel industry.

Research, Development and Technology

Mitsubishi Heavy Industries and Southern Company have commenced operation of their carbon capture and sequestration (CCS) demonstration project at Southern Company’s Barry coal-fired power plant in Alabama, USA, marking a world first. The installation captures 500 metric tonnes per day of CO2 from the flue gas of the power plant and transports it around 19 kilometres, then injects it into the Citronelle Dome geologic structure at a depth of 3,000 to 3,400 m. Testing has been on-going since June 2011, and has shown a CO2 recovery rate of above 90% from the flue gas. The installation consists of a flue-gas scrubber, a flue-gas CO2 capture/regeneration system, compression machinery and electrical components, and uses proprietary technology developed by Mitsubishi and Kansai Electric Power Co.

The UK’s Department of Energy and Climate Change announced recently that it was working with China’s Energy Research Institute to adapt the UK’s ‘2050 Calculator’, developed in 2010, to the Chinese economy. The calculator is a tool that allows analysis, at a country scale, of the effects of different energy strategies, and can be used by both planners and by the general public. China and the UK’s collaboration culminated with a high-level conference between the two countries in mid-September. The UK has also been working on rolling out the calculator in Belgium and South Korea.

Company News

Vattenfall has announced that it will restructure its business into a Generation segment and a Distribution and Sales segment, replacing the current three segments. The Generation segment is to be divided into four business divisions – Sustainable Asset Development, Production (which includes hydro power, gas, lignite, hard coal and wind), Nuclear, and Asset Optimisation and Trading. The restructure was brought about, according to the company’s press release, to allow nuclear power generation to be vertically managed (to allow for better quality and safety), and to grow renewables, where the company will focus investment. Vattenfall also recently announced that its ChlorOut subsidiary, which sells an additive to reduce corrosion and deposit formation in biomass and waste fired boilers, won a contract to supply the technology to Andritz for a biomass-fired bubbling fluidised bed to be built in Karlstad, Sweden, to be commissioned in 2014.

RWE npower has applied to extend the life of its biomass-fired Tilbury plant in Essex, UK. The plant was converted to be fully biomass-fired in January this year, but a fire at the plant closed it between March and June. Despite this, it is expected to complete the operating hours assigned to it under the EU’s Large Combustion Plant Directive (LCPD) by the end of 2013, hence the application for an extension (of ten years) to its life. Obtaining the extension is expected to take at least nine months; it is possible that approval will be conditional upon upgrades to the plant. The LCPD was also behind RWE npower’s September decision to close its 2,000 MW coal-fired Didcot A Power Station in Oxfordshire and its 1,000 MW oil-fired Fawley Power Station in Hampshire. They will both close by March 2013, after having reached their operating hours limits under the LCPD, after around 40 years operation.

GDF Suez is to partner with South Korea’s Posco Energy, Japan’s Sojitz, and Mongolia’s Newcom to build a $US 1.3 billion/€1.01 billion coal-fired power plant to supply Ulan Bator, Mongolia’s capital. The three foreign firms will each hold a 30 per cent stake in the plant, which is to commence operations in 2016, supplying roughly one-half of the city’s needs. Mongolia’s economy is presently one of the fastest growing in the world, largely due to mining investment.

Turkey’s Hattat Holding and China’s Harbin Electric have announced they will build a $US 250 million/€ 194 million manufacturing plant in north-west Turkey to produce boilers, generators, and turbines to reduce Turkey’s reliance on imports for such products. The plant is scheduled to be completed within two years, and will be built in Cerkezkoy in the province of Tekirdag. The range of products will cover coal, wind, natural gas and nuclear power generation, and will employ around 2,000 people. Hattat and Harbin are due to tender together for contracts to privatise some of Turkey’s power plants.